They’re exempt from federal taxes and in some cases, state and local taxes

Low default rates

Low price volatility

Diversification

Attractive returns

Despite dire economic conditions around the country, muni bonds have retained their appeal. The “why” answer isn’t simple, but some have hazarded a few guesses. Those include the fact that the likelihood of default is small, and municipal bonds often perform according to the “yield opportunity” that investors are looking for, reports Palash Ghosh for International Business Times.

Meanwhile, SEC Chairwoman Mary Schapiro has pressed for tougher disclosure rules for municipal bonds, whose history as a safe investment has been jeopardized by dwindling tax collections and record budget deficits by states and rising defaults by local borrowers, reports Ellen Rosen for Bloomberg.

For more stories about bond ETFs, visit our category. You can find a full list of muni bond ETFs in our ETF Analyzer; if you click “expanded view,” you’ll be able to sort the options by yield, performance and more.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.